Submetering Water in Ohio

16 Replies

Hey BP Nation,

I am a young investor who has been hunting for my first property to househack in the Cincinnati area, and I am happy to report that I have a duplex under contract!! I am very excited to get started and start getting invaluable firsthand experience self-managing my property. 

My questions today is in regards to submetering water in my duplex. Currently there is only one water heater and one water meter. From what I have seen looking at other duplexes who have split utilities, I always see a second water meter and water heater. Does anyone have experience submetering their water in Ohio? Any recommendations on where I should start? Any help is appreciated in advance!

@Chase Clemens We use Guardian...probably best to connect with them directly...they seem to be getting more selective with what properties they take on...

As an alternative, check with the city...maybe they would be willing to sell you an extra meter if you install it...

Good luck

Congrats on getting the first one going! 

Up in CLE most duplexes only have one water meter. As the owner, you'll ultimately be responsible for water/sewer/garbage, even if you can bill it back to the tenants one way or another. Those utilities are often difficult, expensive, or impractical to submeter. But in your case, you should have two tanks and furnaces that are metered to the tenants respective gas/electricity bills which they will have in their name. 

Some landlords charge a flat per person monthly rate for water/sewer in these situations. 

@Brandon Sturgill Thanks for the advice! I'll give Guardian a call in the morning for some more info. I'd just like to have an idea and understanding of the requirements in the case I deem it necessary.

@Ryan Evans You bring up a good point - it may not be a good investment to spend $2000-4000 submetering water if it only saves me $50/mo in utilities. Either way, I need to get the numbers to make an educated decision. Cheers!

@Chase Clemens  Sub-metering can also help you track if there is a leak or running toilet in a unit. I know one investor that tracks the water usage and will investigate if something is amiss. I have yet to submeter my 2 quads and duplex but I will probably get around to it when my plumber does not have a lot of work to do. It is significantly cheaper if you install the meters yourself.

@Remington Lyman that’s definitely an added benefit to submetering. I appreciate you taking the time to give me some feedback - Cheers!

I’ll have to call the city to see if I can have a licensed plumber install them on my behalf, since I have personal connections to a few plumbers who will do the work for little to nothing!

@Chase Clemens hey Chase I just closed on a Triplex in South Euclid and looking to get the water submetered. I reached out to Guardian but they don't seem to do smaller units like a Triplex. Did you find any other solutions out there?

@Tristan Colborg I got a similar answer from Guardian. I reached out to the City of Cincinnati via email for clarification and received some vague answers. Basically they said anything after the main meter is the home owners responsibility and that I would need to file permits as per the permitting requirements. 

Even if I were to have a licensed plumber install a second water heater and water meter, I’m not sure how I would go about charging the tenant unless I personally went and read the meter each month. Also would have to figure how to pipe it up to only the second floor water supply, which may be difficult without opening up a bunch of walls!

Let me know if you end up figuring anything out! I may call the City for more clarification but as of now I’ve got my hands full with a new promotion and a few projects!


Best,

Chase

Ultimately, What did you guys end up doing? I would like to buy a duplex in Cleveland and want to bill the tenant. I know I wouldn't be able to evict them over water but I would like to try and bill to reduce expenses. 

Originally posted by @James G. :

Ultimately, What did you guys end up doing? I would like to buy a duplex in Cleveland and want to bill the tenant. I know I wouldn't be able to evict them over water but I would like to try and bill to reduce expenses. 

 I don't believe you are even allowed to submeter with the Cleveland Water Department. I could be wrong, but I am pretty sure they don't allow it. 

I looked it to doing it yourself, but the time and resources are not worth it. Pretty much the main reason many investors tend to stick with SFRs in Cleveland.

@Tom Ott

I know you can't legally evict them for not paying water because a landlord is expected to supply a reasonable amount of hot water but it seems you can submeter and try to send them the bill. IANAL a lot of people have fears about that and say they will just rent somewhere else but I think it can't hurt to try and reduce expenses. If they stop paying I would have to eat the bill anyway.

The way Serge Shukhat did it is what I would do. Install the submeter and then new tenants going forward you explain to them they are responsible for all utilities similar to a SFH. You give them the contact number for the company so they can call and activate and are good to go.

@tom Ott I know you and @holton-wise have been in this industry for years, is this reasonable?

https://www.biggerpockets.com/bpp60-serge-shukhat-podcast-transcript-zero-to-sixtyy-rentals-in-four-years

Originally posted by @James G. :

@Tom Ott

I know you can't legally evict them for not paying water because a landlord is expected to supply a reasonable amount of hot water but it seems you can submeter and try to send them the bill. IANAL a lot of people have fears about that and say they will just rent somewhere else but I think it can't hurt to try and reduce expenses. If they stop paying I would have to eat the bill anyway.

The way Serge Shukhat did it is what I would do. Install the submeter and then new tenants going forward you explain to them they are responsible for all utilities similar to a SFH. You give them the contact number for the company so they can call and activate and are good to go.

@tom Ott I know you and @holton-wise have been in this industry for years, is this reasonable?

https://www.biggerpockets.com/bpp60-serge-shukhat-podcast-transcript-zero-to-sixtyy-rentals-in-four-years

 It may just depend on the local water company. For example, I believe Cleveland Water will not allow for a split. If you do it on your own you may be fined for meter tampering. 

In the Cleveland area you can bill back water in a few different ways.  First and easiest is called RUBS, you can use a formula (there are a few that are industry accepted) and charge back the water based on a ratio system to the tenants.  Second way is to assign a flat water and sewer fee to each unit that get updated annually based on actual consumption, this can be easier for the tenants since is does not fluctuate but it doesn't discourage irresponsible water consumption and the third is to actually submeter.  Please note that in the city of Cleveland you are not allowed to bill a tenant for an unmetered utility, some suburbs may copy this but they have not yet.  You should have someone who is active in property management day to day who can help you know if this pops up for any of your properties. 

I don't think that Cleveland Water cares if you install your own meters after their meter for the purposes of passing on the charges to the tenants.  They will not help you or split your service and bill each separately.  Keep in mind that you may have to do some significant rerouting of your plumbing depending on how the builders ran the original pipe, in a top bottom they might have too much common pipe to get the metering done.

There are companies out there if you look into it that you can contract with they will install the meters, get the reads over cell signal, and then bill the usage back to the tenants.  The tenant would actually pay the third party the water cost and then the third party would pay the balance less their fees back to you.  By having them pay the third party it feels like a real utility instead of a landlord trying to nickle and dime them. 

All of these have advantages and disadvantages but in the end will net you more cash.